How RTL is ripping off the state with a second company

One company is famous, the other is a profit-maker: that’s how simple the tricks of our public service are.

CLT-UFA, the company behind RTL Luxembourg, has quite a few children. These include the advertising agency IP, ENEX, Media Assurances and, in addition to a few other companies, also BCE: Broadcasting Center Europe. This company, which is basically responsible for all the technical tasks, has recently also had another, more problematic task. It is supposed to declare state subsidies as its own profit and pass them on to Bertelsmann.

BCE and RTL Luxembourg are one unit

Here, BCE is known for its antennas in Jonglënster and its collaboration with RTL Luxembourg. But BCE is not just a small technology agency in Luxembourg, it is one of the most important network and transmission companies in Europe. The BCE is also directly connected to other chains of the RTL Group. And in addition to its headquarters in Luxembourg, the BCE has offices in France and Germany. It is a group that aggressively defends its market position, for example by acquiring competitors.

However, the group’s activities are concentrated in Luxembourg. Without the BCE, the operation of RTL Luxembourg would not be possible. For example, the BCE is the host of the RTL.lu website and is responsible for studio and transmission technology. The fact that RTL Luxembourg and the BCE are a kind of unit is also reflected in the personnel. Since 2021, the CEO of RTL Luxembourg has also been the head of BCE, and the CFO of BCE is now also the CFO of RTL Luxembourg (source). A circumstance that should prove to be extremely useful.

The state makes sure that BCE is well taken care of

As RTL always likes to report, its sister BCE is not only on site for the RTL program, but also for all other broadcasts in the country. The monopolist also receives all other orders from the state. So „Chamber TV“ only runs with the help of BCE. In 2018, the entire set-up of Chamber TV, Chamber Aktuell and also the broadcasting technology in the parliament was renewed. At the state funeral of Grand Duke Jean it is the BCE that transmits the images „to the whole world“ and the BCE is also a premium partner of the European Capital of Culture Esch2022 and even writes about this collaboration in the annual report for 2022 that it helped to strengthen the position of the BCE „in online video platform“. It’s a good thing.

Even when it comes to other areas of its business, the monopolist receives many public contracts. For example, the BCE is supposed to test the new DAB+ technology, which is supposed to replace the classic, analog radio frequencies. Here, an extremely lucrative business awaits the BCE in the future: Even radio stations that are not part of RTL will be dependent on the BCE. The BCE is also involved in the state-sponsored „Lu-CIX“ initiative, with its huge data center in Kirchberg. The BCE even accompanies state visits so that, with the support of the Minister of State and the Minister of Economy, it can open up new markets, e.g. in Rwanda. The state therefore takes good care of this company - and not just with good contracts and integration into national strategies, but in the past also directly with a subsidy that was basically supposed to benefit RTL TV.

Money from the state treasury

With the „Subsidy to the company BCE (Broadcasting Center Europe S.A.) for contribution to operating costs to ensure the maintenance of essential television infrastructures“, the state transferred 1.2 million euros to the BCE in 2019, the year in which the BCE took over the European competitor „Freecaster“. For 2020, there were still 700,000 euros. But that subsidy ended in 2021, when the state began to let millions flow directly to RTL Luxembourg - which was of course a much better deal, not just for RTL Luxembourg, but also for BCE, as it turned out.

In the eyes of the government, RTL Luxembourg did not have to wait long to get money for this terribly unprofitable TV program. The fact that it is not unprofitable at all is another story. The state purse will therefore be significantly larger from 1.01.2021. And now the question arises: to whom exactly will the money flow? The fact that RTL Luxembourg is not an independent company, the BCE, however, allows those responsible to get creative. Both structures coexist within the CLT-UFA group. But the state’s willingness to just offset the deficit of RTL Luxembourg means nothing more than that the BCE can make and keep winners at the same time, or pass them on to Bertelsmann. With a little criminal energy, you can quickly figure out what the next step of CLT-UFA was at the start of the new state treaty.

BCE is now making millions in profits

You don’t have to keep something like this a secret in Luxembourg, because who in this country would dare to say anything against RTL? So let’s look at the business balance sheet of the BCE for the year 2021 and remember three important pieces of information. We recall that in 2021 the direct subsidy for national television, which flowed to the BCE, was discontinued, so no more than 700,000 euros for the BCE 2021. We recall that 2021 is also the first year in which RTL Luxembourg received millions directly from the state, to be exact 9,515,492 euros. Thirdly, we recall that for 2021 the personnel at the top of RTL Luxembourg and the BCE changed, so that both structures now have the same CEO and the same CFO.

In 2020, the BCE, which has a turnover of approx. 40 million euros per year, had to bear a loss of 1.2 million euros (comparison: 2019 loss of €2 million, 2018 loss of 1 million euros). In 2021, however, a profit of 2 million euros is under the line. Magic? No, as the directors of the BCE, who are also directors of RTL Luxembourg, explain: „The increase in turnover is mainly explained by […] the increase in services invoiced to RTL Luxembourg following the change in the financing of Luxembourg public television“.

In practice, this means that the BCE within the CLT-UFA now issues expensive invoices to the state-financed program parts. The millions that the state invests in RTL Luxembourg are not used by BCE in practice at all, but flow directly into the pockets of the billion-dollar CLT-UFA as a profit.